News

On Wednesday, January 16, 2013, CCL Senior Litigation Counsel Louis Bograd appeared before a panel of the United States Court of Appeals for the Sixth Circuit to argue the case of Fulgenzi v. Pliva, Inc. Eleanor Fulgenzi developed tardive dyskinesia, a serious neurological disorder, as a result of her long-term use of the generic prescription drug metoclopramide manufactured by defendant Pliva. The FDA had only approved metoclopramide for short-term use of up to twelve weeks, but Pliva failed to include a warning that “metoclopramide use should not exceed 12 weeks in duration,” which the FDA had approved for the label of Reglan, the brand-name equivalent for metoclopramide. The central issue in this appeal is whether Pliva’s failure to include this FDA-mandated warning distinguishes this case from Pliva, Inc. v. Mensing, in which the Supreme Court held that most failure-to-warn claims against generic drug manufacturers are preempted on grounds of impossibility, because federal law prohibits generic drug companies from providing warnings that differ from those provided by the equivalent brand-name product. Fulgenzi is one of a number of post-Mensing appeals currently being considered by various federal circuits.

Emphatically rejecting the Indiana Solicitor General's argument that the constitutionality of a state cap on compensatory damages in medical malpractice cases was settled for all time when the Court upheld its constitutionality in a 1980 case, Johnson v. St. Vincent Hospital, the Indiana Supreme Court on January 15, 2013, held that plaintiffs who timely raise their constitutional objection are entitled to put on evidence in support of their arguments.  The cap originally limited all damages in medical malpractice cases to $500,000 and, after several amendments, now imposes a limit of $1.25 million.

The case argued by CCL's Robert S. Peck was brought after Debra L. Plank's doctors failed to diagnose an obstructed bowel that caused her death.  In 2009, a jury sustained her estate's charge that the doctors had committed malpractice and awarded compensatory damages of $8.5 million.  That verdict was reduced pursuant to the cap to $1.25 million.

The State of Indiana argued that the Johnson case "definitively settled" the cap's constitutionality. The Indiana Supreme Court unanimously held that was wrong.  Instead, the Court accepted CCL's argument that, whatever crisis conditions were deemed to have justified the cap in the 1970s, changed modern circumstances can render the cap unconstitutional today.  To that end, overruling a contrary trial court determination, the Court said plaintiffs may introduce evidence of how circumstances have changed and why the cap no longer fits its intended purposes.

Unfortunately, the decision will not help the Plank family.  The Court also found that, by not asserting their constitutional objection early enough in the case and thereby providing sufficient notice to the defendant that it might want to pursue a different trial strategy to avoid potential liability above the cap, the Planks had waived their constitutional objection. Other plaintiffs will instead have to undertake the constitutional challenge strategy that the Court approved in Plank.

On January 8, 2013, the U.S. Supreme Court heard oral argument in Delia v. E.M.A., an important Medicaid lien case in which CCL had submitted an amicus brief on behalf of the American Association for Justice and North Carolina Advocates for Justice in support of Respondent. During argument, the Justices and counsel for respondent made several implicit references to the CCL brief. First, Justice Sotomayor told Petitioner’s counsel that the North Carolina statute at issue was not the sort of state procedure that the Court had cited favorably in its earlier Ahlborn ruling: adopting an argument made in the CCL brief, she said: “I don't see the North Carolina procedure referenced in Ahlborn as something that States could do. It wasn't referenced directly in the -- in the opinion, and it wasn't referenced indirectly by the amici. The amici were talking about substantially different procedures.” Later, counsel for Respondent engaged in a colloquy with Justices Sotomayor and Ginsburg about North Carolina’s statutory allocation procedure for liens in workers compensation cases; that statutory procedure had also been brought to counsel and the Court’s attention by the CCL amicus brief.

You can’t have a lawsuit without evidence, and federal rulemakers are making it too easy for evidence to disappear, according to CCL attorney John Vail.

Vail, who regularly follows and comments upon proposals before the committees that make rules for the federal courts, told the committees in written comments that they should not and cannot prohibit a federal judge from giving an adverse inference instruction to a jury when applicable state law prescribes that action. 

The Committee on Practice and Procedure of the federal courts, known as the standing committee, debated Vail’s points during a two-day meeting in Cambridge, MA, on January 4-5.

The committees will publish for comment a draft revision of Federal Rule of Civil Procedure 37, which will guide federal judges in creating curative measures and granting sanctions when parties fail to preserve, or purposefully destroy, evidence

When should a judge step down from a case due to the appearance of a conflict of interest?  That question animates the work of two American Bar Association ethics committees, who have struggled to develop new judicial conduct rules that implement the Supreme Court’s 2009 decision in Caperton v. A.T. Massey Coal Co., where the court ruled that due process required a West Virginia supreme court justice to have stepped down from a case in which one party had spent $3 million in support of the justice’s election.  Crafting an appropriate rule, however, has proven difficult.  An article in the January 2013 ABA JOURNAL quotes CCL President Robert S. Peck about the difficulty in making sure the rule captures potential bias in favor of an election supporter or opponent without putting the onus on the judges to discover what is being spent and by whom, especially when state law often prohibits a judge from knowing that information.  Peck’s position was supported by the ABA’s Judicial Division.  

In China Terminal & Electric Corp. v. Willemsen, a Taiwanese corporation has asked the Supreme Court of the United States to review a decision of the Oregon Supreme Court recognizing that its courts have jurisdiction over the foreign manufacturer.  China Terminal & Electric (CTE) manufacturers battery chargers used in motorized wheelchairs sold by an Ohio corporation throughout the United States, more than a thousand of which were sold in Oregon during a two-year period of time.  Because CTE does not directly export its product to Oregon, it claims that the state violated its due-process rights by making it answer in court for the death of a woman who was physically incapable of escaping the in-home hospital bed she was in, when the battery charger allegedly sparked a fire that engulfed her bedroom and immolated her.  CCL, representing the estate and heirs of the deceased, filed a brief in opposition to CTE’s petition for certiorari, written by Robert S. Peck.  The brief argues that the Oregon Supreme Court properly followed the U.S. Supreme Court’s recent decision in J. McIntyre Machinery, Ltd. v. Nicastro (2011), in determining that the state courts had jurisdiction over CTE, that CTE’s agreement to hold the Ohio wheelchair manufacturer harmless and to be insured against any liability that might arise makes CTE liable for any judgment, whether or not it participates in the trial and therefore moots the due-process issue it seeks to raise, and that it is premature to revisit the Court’s Nicastro decision before many courts have had an opportunity to apply it.   The petition in the case is scheduled for review at the justices’ conference Jan. 18.

On December 17, 2012, CCL filed an amicus brief on behalf of the American Association for Justice and North Carolina Advocates for Justice in support of Respondent in the case of Delia v. E.M.A., now pending before the U.S. Supreme Court. The Delia case involves Medicaid liens placed on tort recoveries obtained by Medicaid recipients from liable third parties. Federal law prohibits state Medicaid agencies from placing liens on any portion of a recovery that does not represent compensation for past medical expenses. The issue in Delia is whether a state may evade that requirement by unilaterally deeming a significant portion of any settlement as repayment of medical expenses without any consideration of the facts surrounding a particular settlement. CCL’s amicus brief, authored by CCL Senior Litigation Counsel Louis Bograd, argues that the anti-lien provision of the federal Medicaid act requires that third-party recoveries be fairly and equitably allocated between past medical expenses and other types of damages. The brief describes how numerous states employ evidentiary hearings to allocate Medicaid settlements and notes that North Carolina itself uses such a procedure to allocate damages in workers’ comp cases. The Supreme Court will hear argument in Delia v. E.M.A. on January 8.

The American Association for Justice features CCL Litigation Counsel Valerie M. Nannery in a continuing legal education webinar on Medicare Secondary Payer issues.  Ms. Nannery discussed cases settled for less than the full value of the claims and how to assure that Medicare’s subrogation rights do not entirely preclude any recovery for the plaintiff, focusing her discussion on current and developing case law in this area, including the decision in Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010), a case in which CCL’s Robert S. Peck was counsel for the plaintiffs. 

On December 5, 2012, CCL Senior Litigation Counsel Louis Bograd argued the case of Morris v. Teva et al., before the United States Court of Appeals for the Fifth Circuit. Plaintiff Penny Morris developed tardive dyskinesia, a serious neurological disorder, as a result of her long-term use of the generic prescription drug metoclopramide manufactured by the defendants. In July 2004, the FDA approved a change to the label of Reglan, the brand-name form of metoclopramide, to add a bold-faced warning that “metoclopramide use should not exceed 12 weeks in duration.” Yet no manufacturer of metoclopramide ever communicated this new warning to Ms. Morris’s doctor, either through a Dear Doctor letter announcing the change or by publishing the revised warning in the Physician’s Desk Reference. The central issue in the Morris appeal is whether this failure to communicate a warning approved by the FDA distinguishes this case from Pliva, Inc. v. Mensing, in which the Supreme Court held that most failure-to-warn claims against generic drug manufacturers are preempted on grounds of impossibility. Here, federal law did not prohibit the defendants from notifying doctors of the new FDA-approved warning. Morris is one of a number of post-Mensing appeals currently being considered by various federal circuits.

The Mississippi Supreme Court held an extended, one-hour-and-thirty-minute oral argument in two consolidated appeals, Texaco, Inc. & Chevron Corp. v. Rosalyn Simon, No. 2010-CA-01921. CCL’s Andre M. Mura and Robert S. Peck both argued on behalf of the Plaintiffs/Appellees.

 In this appeal, Texaco and Chevron are challenging a jury verdict in favor of young adults and a child injured when, during the terms of their pregnancies, they were exposed to leaded gas that leaked from underground storage tanks. The jury found that Texaco was the owner of the tanks and gas and was negligent for failing to inspect or maintain the tanks. It awarded compensatory damages to be paid by Texaco and Chevron, which merged with Texaco in the 1990s. The evidence at trial demonstrated that Texaco had purchased the tanks from Sinclair Oil in the late 1960s; this sale of personal property did not implicate the statute of frauds (which only applies to the sale of land) and thus was proven through tax receipts, custom and practice evidence, and oral testimony. Evidence at trial also demonstrated that 78 percent of such tanks fail after 10 or 20 years of service. The tanks at issue in this case had been in service for decades when Texaco purchased them; yet Texaco never inspected or maintained them. Lastly, plaintiffs established at trial that exposure to leaded gas was the cause of their injuries. On appeal, Texaco has denied ownership of the tanks, and has challenged the probity of Plaintiffs’ causation evidence. Chevron has argued that the judgment should apply only to Texaco, because it has no presence in Mississippi and thus is outside the jurisdiction of its courts, and because, as a matter of corporate law, it should not be held liable for Texaco’s negligence.